The Friday Report Blog: August 19th, 2022

Quick wrap up of a few hot topic newsworthy stories in the supply chain logistics industry

PepsiCo to Construct Largest U.S. Beverage Plant

The beverage division at PepsiCo has announced plans to build the largest plant of its kind near Denver, Colorado. The 1.2 million square foot bottling plant is tentatively scheduled to open in the summer of 2023. It will produce beverages such as Pepsi, Gatorade, and Muscle Milk. PepsiCo Beverages North America has operated in Colorado for almost 75 years.

The bottling plant will be three times larger than the existing facility in the area, creating 250 new jobs. The plant will also retain the 250 current employees. PepsiCo says that this facility will be the most sustainable beverage plant in the U.S. They will achieve this by incorporating environmentally friendly attributes into its construction and operations. The company aims for it to achieve 100% renewable electricity and reduced virgin plastic use.

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Biden Signs Inflation Reduction Act, Encourages North American EV Battery Production

President Joe Biden recently signed an expansive tax, health, and climate bill. The Inflation Reduction Act is landmark legislation which includes provisions designed to encourage electric vehicle companies to grow their North American manufacturing operations.

The new law totals $437 billion and includes $369 billion in investment in climate and energy policies. It is expected to produce $737 billion in revenue for the government over the next ten years. It also contains tax credits that could total $7,500 for consumers who purchase electric vehicles. The tax credit only applies if the final assembly of the vehicle occurs in North America. In addition, parts of the electric vehicle’s battery must also not have any parts from a foreign entity, including Russia and China.

The Act also states that beginning in 2024, electric vehicle companies must obtain at least 50% of their battery components in the U.S. or allied countries. In 2026, that number will increase to 80%. By 2029, 100% of electric vehicle battery manufacturing must be in North America.

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Gap Introduces Logistics and Fulfillment Services

Gap recently launched a logistics and fulfilment service for retailers. The company joins a growing number of businesses that are utilizing their supply chains to increase revenue. Companies that have launched their own supply chain service include American Eagle, Target, and Walmart.

Gap’s GPS Platform Service will provide omnichannel fulfillment for retailers through its nationwide distribution system. The network contains 13 fulfillment centers across North America that can process up to one billion products per year. Gap is currently investing in the construction of two new distribution centers in Texas and Canada. Each will be equipped with robotics and automation. Gap plans to spend $700 million on supply chain and technology investments this fiscal year.

The GPS Platform Service will offer several services such as next-day and two-day shipping, short term storage, cross-docking, and a self-service portal. The self-service portal will be equipped with Application Programming Interface integrations that allows connection to Amazon and Shopify.  GPS Platform Service will also offer reverse logistics services that include initiations, shipping labels, and return procession.

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